I worked in several Russian companies as Contracts Manager and in related roles at both domestic and international projects. What I can tell you exactly is that there is no such thing as specific Russian Commercial Management, there are may be some cultural differences between Russian and Western Europe management style, but methodological basis is based on the same principals and sources.

If you have any specific questions, I'll try to share with you my thoughts and observations based on my past experience.

• University of Grenoble
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2020-03-25 13:38:15

Hello Andrei,

Thanks for your answer, this confirms what I had originally thought!
Is there any reason why there isn't any Russian Commercial Management? Is it linked to hierarchy in the business structure?
Also, would it be worth adapting it to Russia? Or is Russian "Contract Management" more of a legal job better suited to lawyers?

Hi - at my workplace we are mainly dealing with FX related claims that are being submitted as force majeure. In these cases, they are (b) - in that did the party have an opportunity prior to the FM event occurring to reasonably speaking, manage and treat the risk.

• BT
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2020-04-29 14:33:13

Hi
! disclaimer - I don't know anything about Australian law !

but I don't see how option a) can be reasonable.

Risks can appear as time goes by due to changing circumstances and something that is not reasonably foreseeable at one point in time could well be later on.

• IACCM
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2020-05-05 07:35:51

My apologies for the delayed reply to your question.

In general, the clause is referring to an issue that you could reasonably have anticipated and therefore could have prepared for it in some way. That means not only before inception of the contract, but also during its performance.

Even in a case where Force Majeure applies, there is a duty to take reasonable measures to mitigate its effects.

In the case of the pandemic, there are many debates over whether and in what circumstances it represents a Force Majeure event. However, even when disallowed, there may be grounds for claiming frustration of contract or impossibility of performance due to related events.

Hi Cate - look, I'll rise to the challenge of the discussion here. Here's the link to this on the IACCM website, and it's also on the commitment matters blog. www.iaccm.com/resources/

In defence of the Western world, I'll say two things :
1. I think that the relationships of many organisations and their teams are certainly being put to the test right now. Personally, I'm seeing a lot of good outcomes in these challenging times across a number of organisations, especially in the emergency sector which I think is an indication that the relationships, albeit perhaps not as deep as those in Asian culture are seeing good outcomes.
2. I'd turn this question around and, perhaps take the heat off the negotiators, ask if it's the organisations who are stupid, or perhaps better put naive. Again, I see a lot of good stuff in this area. IACCM ave challenged the thinking of people and asked why in times of performance, do we go straight to the penalty clauses after courting a supplier through the RFx process. I see many organisations, my own included, using the Significant Services Contract Framework put out by MBIE in New Zealand to make these relationships stronger. For instance, for every such contract, our CE meets with their CE annually which is evidence that perhaps it's not all lost. But I think many negotiators and those in procurement often have budgetary constraints or drivers set by the business. That is, either they can't invest time and money doing this, or their focus set by their leaders is more focussed on cost reduction as a measure of success.

Hopefully others in the Western world reading this will step up and agree or contribute, or perhaps those from the Asian culture might want to post and share their views and experiences as well.

In terms of the 8 different payment schemes I was specifically referring to what we call 'payment curves' (see attached graphic) as opposed to payment regimes such as cost+ (time and material), fixed price, cost + fixed fee, etc. In this light these are grouped into 5 main families with a couple of variations inside each. These are as follows:

The intent of this discussion is to simply highlight that the choice of payment curve, similar to the choice of performance measure and level, can have a significant impact on the success (or otherwise) of the overall performance management framework. My blog (www.performancebasedcontracting.com) has 3 posts specifically on this topic including the graphics.

I hope this helps and answers your questions. However, please let me know if you have any further questions.

I agree with the idea, basically due to the possible huge claims that may cause extreme damage to the supplier.

sometimes the liability is capped to the total amount of the contract money value, which seems only fair to me as a professional against going with unlimited liability clause, however is there any case that this may be rejected by the client?

• SPL
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2019-08-20 13:54:21

This is a good notion. I recall many years ago a friend of mine who had a well documented idea for a screenplay. The agent he showed stole it (allegedly) and a big entertainment company benefited (allegedly). My friend wanted to sue and he had a great case, but the other side simply put a giant pile of money on the table with a grinning lawyer sitting on the top of it and he had to back down. If he had the option to settle "a couple of hundred" I think he would have taken it.

the problem with limiting losses to the contract value is that in a professional services situation for example the advice given will relate to a much higher value. Eg. advice given costs £300,000 but the advice given is about the terms of a construction contract worth £10,000,000. If the works are faulty and have to be rebuilt, and the contract cannot be relied upon as a result of negligent advice, the loss to the client may well far exceed the £300,000 fee level. the client should be able to pursue the builder but here can't due to negligent advice from the lawyer. the client should be able to pursue the lawyer, but if they agreed a cap of £300k they will not get very far.
Hence you often see clients wanting a cap related to the value of the contract advised on rather than the fees paid for the advice. Insurance should be taken out but that may not cover all losses.

It creates a conflict of interest in which the other members of the joint venture could be affected negatively.

• Allianz Technology
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2019-01-10 08:45:28

Hi,

I'm just trying to understand your position.
Considering that you are managing all contractual relationship with another company (buy and sell side) sounds actually good from your company perspective. It would mean, that your leadership can expect you to have a full overview about the contractually back and forth with this JF. Therefore I assume it's hard to change the mind of your leadership, since I would expect them to see your doublerole as positive.
However on the other side, there is your personal position, meaning being something in the middle of a sandwich, right? I'm not sure about your empowerment, but in worst case you have also very limited authority to change some company rules (discounts, penalties, payment conditions, acceptance criteria etc.). And on buy side you usually have different contractual expectation than on sell side. I assume, this is the tricky part in your situation. Fulfilling the internal requirements for buy- and sell side with the same contractual partner at the same time (and maybe also your partner asks you if you are a bit crazy, since requesting sooo different contracts when you are either on sell side or on buy side).

When the conditions your company expect in contracts are very different on sell side and buy side, this should be communicated as an issue (to your leadership). I think there are 2 options as solution: either the requested second CM as you suggest, or an escalation to the leadership to align clear buy and sell conditions between your company and the JF, which are equal to both parties. such framework conditions would make at least your position more clear. And maybe there won't be anymore need of a split of the CM roles buy side and sell side?

Since I couldn't find many information in your post, I hope, this is somehow helpful?
If your uncomfortable position has other reasons, please let me know.

BR

Kristin

• Omaha Public Power District
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2019-01-21 20:58:03

I probably would start collecting facts: Firstly, establish the relationship between Your Company ("Y Company") and Company X ("X Company") by looking at any specific, written agreement about the services ("X and Y Services"). Also, establish clarity around (1) Y Company's services to be provided to X Company, and (2) X Company's services to be provided to Y Company. At this point, are there any conflicts that you can see/anticipate in your ability as the Contract Manager during the provision of X and Y Services, that perhaps could result in non-performance or non-compliance? Also, how do you escalate and cure any issues of non-performance (for example)? Secondly, I would review the files documenting any legal review, if any, prior to said agreement being reviewed for signature/execution. Were there any concerns that were raised and eventually resolved (internally)? AT the very least, you could start with the resource allocation -- that is, regarding your time management and how to better allocate your skills - in developing your case. Hope this helps. Regards ~ Rose

• CoreLogic
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2019-05-17 09:01:17

Its an interesting role and I recommend your decision to bring in another manager to take one of the contracts.

I would recommend to present this as two different roles:

On the buy side - Contract Manager would play role of a customer and to manage Company X, need to drive and establish Vendor Management Discipline around Contract Administration / Governance / Service Performance / Financial Management / Risk and Compliance

On the sell side - Contract Manager would play role of an engagement partner to drive business relationship / Value addition to Company X/ increase revenue generation from Company X to your company / Joint go-to-market strategy if possible.

This is definitely something that should have greater consideration in my organisation, I have been quite vocal in pushing it. I have worked in teams where particular members have found the lack of bounds extremely stressful as they feel they are crowded out or put upon by the more vocal members, who are equally frustrated it takes so long to get things done. Clarity in defining the roles and responsibilities can often be an enabler.

• Airbus Defence and Space Limited
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2019-08-18 12:37:30

Agreed, this is a great article and really gets you thinking about the behaviours instilled within your own immediate team. If we cannot get the behaviours and roles clearly specified for our own team members first we are setting ourselves up to fail in the wider team and externally.

• Experian
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2019-02-03 22:03:09

Agree - this was quite an insightful article. I've always believed that it should work in reverse - that you should set the objective and then leave it up to individuals to work out how to get there, which is what the article says except for specifying that their roles need to be clear. I believed that if roles were less clearly defined then it gave people scope to expand their remit, however I can see why this can cause confusion.

Hi,
Ive had a lot of experience of very dominant Clients who are never willing to negotiate any give on their side, only improvements for them. I have found you need to identify this type of individual very early on in the process and realise that this behaviour will not change through the lifecycle. Decisions need to be made as to whether the deal that you are being faced with is worth it or not - is it good business for you or are they asking for too much. Id love to hear any specific approaches of how to deal with this type of client as its not easy.